LEGRAND / 2018 Registration document

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MANAGEMENT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2018

2018 HIGHLIGHTS

A stronger sustainable and profitable growth profile In 2018, Legrand undertook many initiatives aimed at fueling its development in keeping with the solid fundamentals that have made it successful. Against this backdrop, the Group intends to: W after having reached in 2018 its Eliot program targets for 2020, step up the development of its connected ranges by acquiring Netatmo, whose 130 engineers have added their expertise in Artificial Intelligence, user experience and software integration into products to the Group’s R&D teams. More generally, Legrand is pursuing the digital transformation of its offering by integrating innovative functions such as voice assistance into user interfaces, displayed at the latest CES (4) in Las Vegas, and by the geographical deployment of its Eliot program; W boost organic expansion by pursuing growth investments, including in particular the launch of numerous new product ranges, and by setting a front office organization in three geographical areas that are better aligned with the structure of its markets and allow more efficient deployment of commercial programs; W after seven acquisitions made in 2018, pursue its strategy of bolt-on (5) acquisitions aimed at strengthening its leadership positions and expanding its accessible market in fields that are very complementary to its existing operations; W optimize continuously its performance with enhanced manufacturing initiatives; the deployment of the “LegrandWay (6) ” to administrative and R&D activities; the targeted digitalization of manufacturing and supply chain processes as well as the achievement of synergies linked to recent acquisitions and the decrease in energy consumption linked with the new Group CSR targets; W launch its fourth CSR roadmap for the period 2019-2021, to maximize Legrand’s positive externalities for all stakeholders through three focal points: business ecosystem, people and environment. Additionally, and for each of these focal points, Legrand has set ambitious targets for 2030 that include raising the percentage of sales made with sustainable products to 80%, boosting the number of women part of management, and reducing the Group’s activities carbon footprint.

Net profit attributable to the Group Reflecting a solid performance, net profit attributable to the Group was up +23.3% compared with adjusted (1) net profit in 2017, standing at €771.7 million. This €146 million rise came primarily from: W the increase in operating profit (+€113 million); W the favorable trend in net financial expense and foreign-exchange results (+€22 million); and W the positive effect of the decline in corporate tax amount (+€8 million) (2) , where the 2018 rates stood at 28% – a five-point decrease from 2017 linked for around three points linked to the announced effect (3) of the reduction in corporate tax in the United States, and around two points due to favorable one-off factors. Cash generation and net debt Cash flow from operations was a robust €1,100.5 million (i.e. 18.4% of sales), up +19.6% from 2017. Normalized free cash flow recorded a +21.5% rise to reach 14.9% of 2018 sales. Working capital requirement stood at 9.2% of sales at December 31, 2018. Free cash flow stood at €746.3 million, up +7.3%. With the ratio of net debt/EBITDA at 1.7 on December 31, 2018, the Group benefitted from a solid balance sheet structure, securing the resources and flexibility needed for sustainable development. Non-financial performance With an achievement rate of 122%, Legrand fully achieved its 2014- 2018 CSR roadmap, demonstrating once again its commitment to creating sustainable value, while taking all stakeholders into consideration. For more information on the non-financial performance statement, readers are invited to refer to the Chapter 4 of this Registration Document.

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(1) 2017 net profit attributable to the Group adjusted for the favorable net impact of significant non-recurring corporate taxation gains and expenses. For more details, readers are invited to consult pages 14, 15 and 20 of the press release issued February 8, 2018. (2) Excluding the favorable net impact in 2017 of significant non-recurring corporate taxation gains and expenses. For more details, readers are invited to consult pages 14, 15 and 20 of the press release issued February 8, 2018. (3) For more information on tax reductions in the United States announced in 2017, and their expected impacts on Legrand’s accounts, readers are invited to refer to pages 14 and 15 of the press release announcing full-year 2017 results, published February 8, 2018. (4) Consumer Electronics Show. (5) Companies that complement Legrand’s activities. (6) Program dedicated to the implementation of best practices within the Group.

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REGISTRATION DOCUMENT 2018